Thread by @LuigiThirty

Quick story time! It's 1973 and it's been a year since the blockbuster release of Pong, the game that kicked off an entire industry of coin-op video games. (Yes, yes, Computer Space, work with me here.)

Pong, like all games at the time, was implemented in TTL circuitry with off-the-shelf parts. That meant it was trivial for other companies to make their own versions of Pong. You can build your own clone out of 74xx logic, even.

Furthermore, there was another problem - distribution. Atari could sell games to bars and convenience stores sure, but the coin-op industry as a whole worked on the distributor system. Distributors signed exclusivity deals with manufacturers and placed games in their locations.

Distributors saw video games as a fad competing with pinball and didn't want to jeopardize their relationships with Bally, Williams, Gottlieb, etc. Distributors also didn't want manufacturers muscling in on their territory directly.

Atari therefore had a problem. How are they going to sell games to distributors who didn't want them in the market?

Why, set up your own distributor behind their backs, of course.

Nolan Bushnell got one of his business partners, Joe Keenan, to set up a distribution company which they called Kee Games. To the outside, Kee appeared to be an independent competitor and distributor. Inside, though, Nolan provided Kee with engineers and licensed clones of games.

There was a public spat in the press, with Kee announcing itself as hiring away Atari engineers and Atari attacking Kee for making rip-offs of their games, and it worked well enough. Distributors were willing to sign deals with Kee.

Kee produced clones of Atari games using Atari parts. It worked like the different brands of a car manufacturer - Atari produced the "luxury" games, Kee produced the "economy" games.

Kee's engineers also produced original games for Atari to "copy." This strategy, though, ended up backfiring with the release of Tank in 1974, designed in-house by Kee. It should look familiar to anyone who's owned an Atari 2600.

Tank was an incredibly popular two-player game, like Pong. It was also more technologically advanced than Atari's games, with graphics stored in ROM chips rather than discrete diode arrays.

It also gave Atari a problem - now buyers wanted *Kee's* games, not theirs.

The industry had also changed since 1972. Distributors had figured out video games weren't a fad and machines weren't interchangeable like jukeboxes or pinball tables.

For the first time, the games themselves were attractions. Now exclusivity deals were bad for business because they could lock you out of carrying the next big hit.

Atari decided the best thing to do would be to "buy" Kee and end the ruse entirely.

They announced they were "merging" with Kee in late 1974, absorbing their games and engineers back into the main Atari.

It also helped that Atari was almost out of cash and Kee was massively profitable from a combination of hit games and their distributor routes.

The Kee label lived on until 1978, still releasing Atari clones and the odd original (Sprint 2, a quiz game, some others) before all releases were simply "Atari" again.

Oh yeah! Even after they merged back into Atari, Kee was still on the forefront of game tech. Tank 8, released under the Kee label, was an 8-player version for larger venues. Quiz Show was the first video quiz game, powered by an S2650 CPU, with 2000 questions on an 8-track tape.